Entering overseas marketsA Provident Financial case study

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Page 1: Introduction

Provident Financial was founded in West Yorkshire, England in 1880 by Joshua Waddilove. The company’s headquarters are still based in West Yorkshire. However Provident Financial has grown from a family owned business to a public limited company (plc) whose shares are quoted on the London Stock Exchange. Provident Financial is a group plc; its largest subsidiary is Provident Personal Credit.

Provident Personal Credit is a home credit company. This means that it provides small, unsecured, cash loans to customers in their own homes and collects the repayments weekly from their homes. Provident Personal Credit has more than one million customers in the United Kingdom and the Republic of Ireland. So someone in one in every twenty homes in the British Isles is a customer. Provident Financial has recently started to offer its services outside the UK and Ireland and now has over 80,000 customers outside the British Isles, mostly in Poland and the Czech Republic.

This case study focuses on the expansion of Provident Financial into markets outside the United Kingdom and Ireland. One of the major reasons for this expansion was the belief that there was a demand for the company’s home credit service in countries beyond the United Kingdom.

Home credit

Home credit customers usually borrow small amounts of between £50 and £500 which they pay back to the company over a short period of between six months and a year. The company’s agents usually arrange the loans with customers in their own homes. The charges on the loan are fixed at the beginning and will not change. However, if the customer’s circumstances change, the agent can agree that the customer can pay back a reduced weekly amount. But even if the customer has to take longer to pay, the total amount that the customer pays back will not change. When a loan is granted the agent will agree on a convenient time to call each week to collect repayments from the customer. Provident Personal Credit has more than 10,000 agents operating in the United Kingdom and Ireland, most of whom are women.